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CA Technologies to lay off 800 in restructuring; LI impact unclear

CA Technologies, formerly called Computer Associates, has about

CA Technologies, formerly called Computer Associates, has about 1,000 employees in Islandia, down from 1,400 four years ago. Credit: Kevin P Coughlin

CA Technologies, the Manhattan software company that retains a presence at its former headquarters in Islandia, plans to lay off about 800 employees and close some facilities, the company announced.

Last week the board of directors approved the restructuring plan that is expected to be "substantially completed" by the end of fiscal 2019, which began April 1.

The company has 11,000 employees worldwide, including about 1,000 in Islandia, a spokeswoman said Wednesday. The local impact of the restructuring was unclear.

CA, formerly called Computer Associates International, moved its headquarters to Manhattan in 2014 after 22 years in Islandia.

The company sold its 778,000-square-foot Islandia facility in 2006 and has a lease on the building through August 2021. Head count at Islandia has declined almost 30 percent since 2014, when about 1,400 employees worked there.

"We have excess space in many offices, so we will consolidate to a smaller footprint," the spokeswoman said in an emailed response to questions about the future of the Islandia facility. "And as we look to have more of our people collaborate together in person, we will focus our hiring in our larger hub locations."

Shares of CA fell 0.5 percent Wednesday to close at $34.40. A year ago the stock closed at $31.07.

In a conference call Tuesday after the company's fourth-quarter earnings release, chief executive Michael P. Gregoire said the company is seeking to consolidate smaller offices and "get large groups of employees into bigger locations that are strategic."

He said CA needs fewer employees with skills related to "legacy platforms" and more with skills related to software as a service. In that model, software is licensed and hosted by the provider in the "cloud," a remote data center.

Gregoire said that 500 to 600 people with "different skills" will be hired in "more strategic geographic locations."

CA expects to face severance costs of about $90 million to $100 million and facility costs of about $50 million to $60 million in connection with the fiscal 2019 restructuring.

After the market close Tuesday, the maker of software for the corporate market posted fourth-quarter revenue of $1.1 billion, a 7 percent increase over the previous year's quarter.

Net income for the quarter ended March 31 was $207 million, or 49 cents per diluted share, compared with $157 million, or 38 cents per diluted share, in the fiscal 2017 period. 

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